EricH said:
Utilities are much more concerned about the entire Net Energy Metering subsidy, whereby a customer who places solar panels on their roof can avoid any responsibility for the overall utility system costs, by feeding power into the grid at noon (credited at on-peak retail rates, for solar owners on TOU rates), then sucking it back off the system during the afternoon/evening and night.
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I'm far more sympathetic to people who invested in solar last year, concerned the existing economics of their decision will be materially impacted, than I am to folks not-yet committed to solar, who are alarmed that the free ride of Net Energy Metering may be curtailed before they can sign a contract.
My solar system, designed to avoid my SCE bill being pushed into higher electric tiers by the energy demands of my Leaf, has just passed its first "birthday." Despite this, I support almost everything EricH is saying. Some "reform" is required, but please understand I do
not endorse SDG&E's specific proposals. In the coming world in which 5%, 10%, or even 15% of total grid energy is supplied by residential solar, finding what is "fair" to connected customers with solar, customers without solar, and the utilities won't be easy. In some cases, what might seem fair in the abstract might not be economically viable in the details.
As EricH has discussed, the two state-wide policies that need modification as the percentage of residential solar installations has grown are:
1. The "freezing" of Baseline tier-1 rates, forcing an excessive inflation of upper-tier rates, and
2. The requirement that no matter what tariff you are on, TOU or standard, the price you are credited for net production at any time of day or season must be exactly equal to the price you are billed for net consumption during that same point in time.
These two policies have awarded the highest incentives to "go solar" to the highest-tier consumers. Before I got my Leaf, my household was too frugal in electric usage to justify solar, because the low rates for Baseline and tier 2 gave me too slow a payback for solar production. Now, with both the Leaf and TOU metering, I have a strong incentive to increase my grid production, because it pushes me deeper into the Level 2 tier of SCE TOU, in which during the Summer I get $.30/kWh for delivery and $.30/kWh
more for generation. SCE has stated that these prices have no connection with the reality of their costs.
I suggest that making the tiers less progressive (unfreezing of Baseline rates) would yield fairer overall incentives. This, together with lower prices for solar installation, could enable a broader fraction of the customer base to justify adding solar.
With respect to policy 2, some comments on this thread have expressed alarm at the possibility of being charged to send power back to the grid. I don't believe this is going to happen, but I could live with a slightly
lower price for net generated power vs net consumed power during a particular TOU. The grid is performing a really wonderful service to solar customers. It is storing power for us not only between day and night cycles (with the night usage augmented by our Leafs charging), but across seasons. High credits we earn in the Summer can be redeemed in the Winter. This much storage is equivalent to 100s of thousands of $$ of Leaf battery technology.
The new principle that the utilities, led by SDG&E, are discussing in various forms is that there should be some price to be paid for both distribution and generation facilities that are still heavily used by solar-generating customers, but now used with more fluctuation. The solar power you consume immediately does not go through the meter, but I would think that most high-tier customers are moving more kWh to/from the grid with solar than without. Yes, the power we send back to the grid only goes a few yards before being consumed by one of our neighbors, but the neighbors can't
rely on us to always be supplying that power, so there would seem to be negligible saving in utility infrastructure. None of my neighbors (or anyone else in my area that I know) is on TOU, so even if they are on tier 3 or 4, the rate they are paying SCE for my power is much less than my credit. It would seem the power we supply locally is more valuable in the abstract than in reality.
SDG&E seems to be also proposing a
demand charge, based upon the
maximum power drawn from the grid during the month. One review found a suggested demand price of $.95/kW (not kWh). Perhaps they are asking for a higher price. My TOU meter reports my maximum for each billing month. Right now it is showing 4.2 kW, so this would represent a debit of about $4 against my ongoing surplus credit. Since I am currently
not billed for any demand charge, there were a few times this summer when I charged my Leaf at the same time as I ran the A/C, late in the day with little solar, pushing my maximum usage above 7 kW. I see nothing wrong with having an incentive to avoid such peaks, but perhaps this demand charge should be adjusted by TOU. Late night demand should not cost the same as peak-period demand.
During the Chief Vehicle Engineer meeting at Google, Nissan floated the idea of having the Leaf adjust its late-night charge rate to reflect the short-term availability of wind power. This would improve night-time grid efficiency at little infrastructure cost, and the savings could be shared between the Leaf owner and the utility.
PG&E has a clever, complicated TOU tariff that seems to work in their favor without violating principle 2. They have added a third TOU period, "near-peak" and their peak period runs from 1-7PM M-F. This splits one's solar production between peak and off-peak, and adds 6-7PM consumption to the peak period. They also have 5 tiers for TOU. All this makes it much harder to drive into high-priced negative territory for the big TOU solar payoff like I get with SCE.
As the grid evolves with more fluctuation from renewable sources there is a risk of "stranded investment" for both the utility and the connected solar customer. I suggest that enlightened policy can find a reasonable balance that minimizes this for all parties.
